The Case for Viscount Systems, Inc. (VSYS)

December 20, 2012

In October 2012, SoundView Research issued an investment analysis report on Viscount Systems and The IT Bridge To Physical Security. The report, summarized below, discusses major anticipated technology driven changes underway in the access control industry, and how Viscount Systems offers a unique public investment vehicles in this area, with the potential to generate multiple years of rapidly expanding revenue growth and high margins.

Viscount has launched a suite of new IP-based products that are changing the game in the physical security business, particularly building access control and management. The existing expensive and proprietary “stove-piped” industry is flipping over to modern technology. These systems are being merged with IT-based security tools and methods that leverage existing databases. An IP approach, based on standard IT infrastructure, can be expected to dominate the future of the industry, and Viscount is the only public investment vehicle of its size in this particular space, offering significant returns from current levels.

Considerations driving growth in the industry and Viscount Systems:

• A combination of acute need to comply with regulations plus intense pressure on costs is forcing enterprises to upgrade their existing access control approach and embrace open, modern technologies to lower costs and improve effectiveness.

• Organizations have invested billions in IT-based identity management and logical access security. It’s dawning on everyone that physical access control needs to be managed in the same way as an extension of these systems to eliminate the duplication of cost and effort.

• Viscount Systems has developed their “Freedom” product line into a unique and effective software solution that allows enterprises to manage identity and access management in one place and eliminate the need for expensive proprietary infrastructure.

• Viscount has substantially upgraded their company capability over the last 18 months – expanding their board of directors and advisors, opening their first field office in Washington D.C., and putting the required sales and marketing team in place.

• In the next few quarters Viscount will continue to add new revenues from the Freedom line to their existing core of business in advanced intercom systems. This will enable the company to demonstrate accelerating revenue growth and expanding operating margins.